MasterCard’s New “inControl”
Technically this isn’t all that new, it’s been out since April. But, I hadn’t heard of it before because it’s only available for businesses to use.
I’ll start by giving you a run down on the card and then we’ll talk how that could, and should, be applied to consumers.
Here’s how it goes:
Two backstage passes to a concert with a meet & greet afterwards: $2400. An upscale, 5-course meal with the client: $600. An email from your boss at 8:15 am the next day asking what company business took you to a strip club at 2 am: priceless.
And so it goes with employees who have free rein to ‘wine and dine’ their clients. Sometimes it’s pretty pricey to build that relationship, but sometimes bosses have to wonder how much the employee is taking advantage of the privilege. By the way, I can tell you with first hand experience that – as stereotypical as this may sound – men do take their male clients to strip clubs for a night cap. I’ve had to attend one awful meeting myself and will never do it again. Not once did we get the opportunity to discuss actual business.
Anyway, with MasterCard’s new “inControl” card, bosses can set predetermined limits on the card, block out certain places – like the strip club – have the card declined after a certain hour, and even be sent real-time text messages and emails when the card is being used.
The technology is amazing and there’s a lot of potential with it. On the business side, I can see micromanagers having a field day with this and it could leave room to ruin the employee’s image with high dollar clients that expect a higher limit than $300. But, I have to wonder what kind of business deal would you have with someone that had to be ‘wined and dined’ for $3000, just to hear your pitch? Seems to me that’s money wasted and could have been better invested elsewhere.
MasterCard has established that such a card is possible with those types of capabilities, which has been an argument for years that the technology wasn’t possible and that it would cost too much. Still, they’ve made progress and though the cost for MasterCard to run this program hasn’t been disclosed, being that they rolled it out to the business class first may mean that it’s not as expensive as we were lead to believe. So, in light of the credit crisis how come this hasn’t been rolled out to consumers? I think this is definitely a product we can benefit from, don’t you?
Think about it. If we know we’re fairly susceptible to certain places and we tend to go crazy at those places, we can blacklist it on our card, or simply set a strict limit that we can spend there. Now, the argument comes up that someone could just use another card. Well sure, they could, but if they have to pull out another card, the hope is that they will really consider the purchase.
What I really like about this idea is the fact that you can set limits. If you don’t want that card with the $5000 limit because it’s tempting, then lower it to $500 or whatever number you think is reasonable, but not pushing it. Technically, you can limit yourself on your cards now, but it comes with a price - either by the company or your credit score because companies just jack up your limit without your permission; and lowering it again messes with your ratios – hopefully this won’t be much of an issue when FICO 2008 rolls out. With the “inCharge” card, the limit is set before the card is issued and cannot be raised without written approval.
I think the way that it would work is that you’d be given a specific limit that you can go up to, like $5000, and then you can set a predetermined limit within that amount. If you want to change it in the future, you can go up or down within that amount without impacting your score. Anything over the $5000 and you’d be subject to credit approval and so forth. There hasn’t been a lot of information released on that, so I’m just speculating, but that makes sense – at least, in my mind.
I think this type of card would be a great starter card for preteens and teens. Parents could get the card and set a very small limit, maybe $200 or less. They could have the card declined at places like the mall or other frivolous stores as they deem necessary. It can be used to get gas, car maintenance, school books, that sort of thing. Anything outside of those items would then be declined per the parameters. The same holds true for adults that need to relearn how to manage a credit card. With limits and restrictions in place, they can learn to curb their spending habits and reduce their financial risk by avoiding the overspending trap.
What are your thoughts on this? Do you see this card causing more harm than good, or do you think like me and see it as a benefit?
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